Royal Mail shake-up could allow letter deliveries just three days a week

Royal Mail could be allowed to deliver letters just three days per week, under a series of options outlined by the industry regulator to help the company run a sustainable service.

Ofcom said its consultation document was designed to spark a “national debate” on the future of the UK’s postal service.

It separately announced that the cost of a Second Class stamp would be capped until March 2027 to ensure an affordable option for consumers and businesses.

The possible relaxation of loss-making Royal Mail’s Universal Service Obligation (USO), which currently demands deliveries six days per week, met furious union opposition earlier this week after Sky News revealed at the weekend that the discussion paper was to be published on Wednesday.

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Ofcom said it was clear there was a need for change due to a sharp decline in letter volumes and rising costs, but it said there would be no relaxation of the company’s delivery targets.

Its two main options were changes to existing First and Second Class and business products so most letters are delivered through a service taking up to three days or longer, with a next-day service still available for any urgent letters.

The other was reducing the number of letter delivery days in the service from six to five or even three.

“This would require government and parliament to change primary legislation”, the watchdog said, adding that Royal Mail could achieve annual savings of up to £650m under the most drastic option.

The consultation is due to end in April.

The Communication Workers Union (CWU) had warned on Monday the outcome of Ofcom’s review was “predetermined” and that significant cuts to Royal Mail’s letter delivery obligations could lead to tens of thousands of job losses among its 112,000 members.

Its general secretary Dave Ward said in response to the consultation: “This report is completely dead in the water.

“The response to the leaked information over the week showed that CWU members, the public and politicians are united against the deliberate, manufactured destruction of the postal service.

“In the ongoing debate, Ofcom now have no credibility whatsoever, and their views are an irrelevance to the discussion that must take place between postal workers, businesses and customers.”

In an interview with Sky News, Ofcom chief executive Dame Melanie Dawes dismissed the notion that conclusions had already been made but conceded “we don’t think that doing nothing is an option.”

She also insisted that the views of postal workers were central to the consultation process now underway after the CWU complained it had been given no input to date.

The union’s opposition may indeed find unlikely support from the Conservative government in Downing Street.

The prime minister’s official spokesman signalled earlier this week he was not in favour of a relaxation to the six-day delivery commitment.

Rishi Sunak was said to be of the “strong view” deliveries Monday to Saturday provided “flexibility and convenience and were important for businesses.”

Nevertheless, shares in Royal Mail parent firm IDS were up by 5% at the open.

The company has made a case for reform since 2020, saying the USO had not been updated since 2011 to reflect modern trends, with letter volumes collapsing from a peak of 20 billion to just seven billion in that time.

Royal Mail had warned its very existence would be under threat without government aid, if the terms of the USO were to remain unchanged.

The most likely option is thought to be the scrapping of Saturday post.

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Ofcom said in its document that fewer delivery days could still meet most people’s needs.

Its survey of postal users found 88% prioritised reliability for letter deliveries, compared with 58% for delivery on Saturdays.

The proposals follow cuts to delivery days across many other European countries – with postal services hit widely by the shift to email and online greetings cards.